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If you've listened to big-name bond gurus recently, you might be surprised anybody is still investing in bonds.

A survey of preeminent fund managers reveals a growing number of bears. Last week, Dan Fuss of Loomis Sayles told Bloomberg News this is "the most overbought market" he's ever seen, and he's been in the bond business for 55 years. Pimco's Bill Gross wrote of a "credit supernova" that's running out of energy and time. DoubleLine's Jeff Gundlach has been growling bearishly for some time, telling investors they'd be better off parked in cash awaiting an eventual shift into stocks.

Despite such pronouncements, the bond market remains open for business. Investors put another $3.7 billion into taxable-bond funds last week, per Lipper data. The week saw the launch of the
Eaton Vance Bond
Fund (ticker: EVBAX) and the
WisdomTree Global Corporate Bond
Fund (GLCB), among others, while Fidelity filed the paperwork for a planned corporate-bond exchange-traded fund. Even Fuss delivered his dour assessment while opening a new bond fund for British investors.

This isn't a time to look for easy gains across typical income categories. Most bond markets are at the tail end of long bull runs. Current low yields make bond prices more vulnerable than ever to a seemingly inevitable rise in rates. Today, portfolio managers are differentiated by their convictions—about the economy, about comparative asset-class potential, about market sectors, about which bonds can keep making money.

Barron's spoke with Mark Kiesel, manager of the
Pimco Investment-Grade Corporate Bond
Fund (PBDAX), crowned 2012 fixed-income manager of the year by Morningstar, to see how he's approaching things. Kiesel is avoiding Treasuries and long-dated corporate bonds but says not all bond prices are doomed to fall as interest rates generally rise. "Credit-spread tightening can offset the rate rise, and some bonds can go up," Kiesel says. "We try to find the bonds that will rise."

Kiesel's fund leans on the research capabilities of giant Pimco to find companies he deems "misrated" as junk rather than investment-grade by rating agencies. Many are in the housing and energy sectors.

On the energy side, Kiesel says "we are going to become energy-independent as a country in the next 10 years, and a lot of companies are going to make money off of this." He cites midstream energy companies, which store, transport, or process oil and gas, with operations in the Bakken Shale in North Dakota, such as privately held Hiland Partners, or in the Gulf region, like
Targa Resourcesngls 0.16953257447323808%Targa Resources Partners L.P.U.S.: NYSEUSD41.36
0.070.16953257447323808%
/Date(1427835943012-0500)/
Volume (Delayed 15m)
:
870086AFTER HOURSUSD41.4644
0.1043999999999980.2524177949709865%
Volume (Delayed 15m)
:
67203
P/E Ratio
14.824372759856631Market Cap
7330378881.4093
Dividend Yield
7.833655705996131% Rev. per Employee
6389780More quote details and news »nglsinYour ValueYour ChangeShort position
(NGLS).

Kiesel is eyeing emerging-market opportunities, too, notably in Asian gaming and South American banking, as well as Chinese gas-distribution companies.

Income investors have also been piling into leveraged loans—bank loans made to speculative-grade companies and sold to investors as senior floating-rate instruments. U.S. loan funds reported a record $927 million net inflow last week and grew by $3.3 billion in January, according to Bank of America, while returning 1.06% during the month, versus 1.38% for junk bonds and a loss of 0.89% for high-grade corporates.

Treasuries fell again Friday as January employment data was boosted by upward revisions to December and November job gains. That pushed the 10-year note yield above 2%, to 2.023%, up from 1.943% a week earlier.